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Affordable Care Act

More than 19 million young adults across the United States lack basic health insurance coverage. Although often healthy, young people do need medical care for preventive treatment, regular check-ups, and occasional health problems. Many of them also have costly chronic conditions. Yet rising health insurance premiums price millions of young adults out of the market. The Affordable Care Act aims to provide affordable coverage to millions of uninsured and underinsured young adults.

Highlights of the Affordable Care Act

The law gives states the option of expanding Medicaid, a very low-cost government insurance program, to cover individuals making less than about $15,300 a year. About 8 million uninsured young adults age 18 to 34 could benefit from this affordable insurance option.

The law creates tax credits for those purchasing insurance who earn under about $46,000 a year. Roughly 9 million uninsured young people ages 18 to 34 fall in this category and could receive tax credits. The tax credits will limit the amount an individual pays in insurance premiums for a plan purchased on the new health insurance marketplaces.

For example, a young person who wants to buy a plan on the individual market (i.e. not through an employer) and is making $22,000 will have to pay no more than 5.9 percent of his or her income (or $1,300 yearly in premiums). The tax credits will cover any premium costs beyond that. These benefits start in 2014 and will also assist those currently insured by making coverage more affordable.

The law allows adult children to stay on their parent’s health plan to age 26. The National Center for Health Statistics estimates that 3.1 million previously uninsured young people have already gained coverage, thanks to this provision.

How to find and buy insurance

The Affordable Care Act seeks to make insurance easier to compare and buy, by creating online marketplaces in each state. Individuals can compare plans and purchase the package that works best for them.